The price of iron ore unexpectedly surged in 2016 by about 80 percent, fueled by strong demand in China, but forecasters expect a steep decline in the price this year to less than $60 a tonne.

The company also said its mined copper production, a key growth business, was 4 percent higher than 2015 at 523,000 tonnes, though still below full year guidance. It cited the absence of copper delivered from its Grasberg mine in Indonesia and lower than expected production at its Kennecott mine in the United States for the shortfall.

Through a joint venture agreement with Freeport-McMoRan, Rio is entitled to 40 percent of material mined only above an agreed threshold.

The company set 2017 aluminium production guidance at between 3.5 million to 3.7 million tonnes, little changed on the 3.6 million tonnes produced in 2016.

Rio Chief Executive Jean-Sebastien Jacques said 2016's overall production performance was "strong" and based on cost efficiencies and maximized cash flow.